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tv   Closing Bell With Maria Bartiromo  CNBC  January 13, 2010 4:00pm-5:00pm EST

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closing out a really interesting session today. only about seven or eight stocks on the big boards, just moderately in negative territory. quite a broad-based volume. so we've shrugged off yesterday's concerns. alcoa missing on the earnings at the start of the earnings season. we've shrugged off the concerns about china, tightening policy there.
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and everything that that may mean, is it a bubble, is it not? and we trade, clearly, on the rest of the earnings season. and hopefully for the bulls, some big preannouncements to come. clearly the financials are absolutely key, not only with the four ceos giving evidence on capitol hill today, but you saw during the course of the session that those banks actually made gains. at least of course it is a day david faber interviewed jamie dimon and said a flattening. tried not to give any new news but market was encouraged that he spoke about a flattening of delinquencies and jpmorgan will report on friday and that lake clear focus. then the median-size banks have also made decent gains today. so that's basically how we stand. very few stocks in negative territory. and market that wants to go higher. it just needs that extra leg up. maybe that will be earnings season. something perhaps more sustainable, like growth in employment. weelt wait, we will watch, as ever on cnbc. for the moment, "closing bell" continues with maria bartiromo. [ closing bell ringing ]
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and it is 4:00 on wall street. do you know where your money is? hi, everybody. welcome back to the "closing bell." i'm maria bartiromo on the floor of the new york stock exchange. we saw some real resiliency on wall street today. stocks managing to rebound from an early loss to wrap it up with a gain on the session. the indices near the highs of the day, just shy of them as we finish off at 4:00 p.m. on wall street. more of that coming up. today, all eyes on capitol hill. wall street's top executives -- including loid blankfein of goldman sachs, john mack of morgan stanley, jamie dimon of jpmorgan chase, among others. the executives acknowledge they underestimated the severity of the 2008 financial crisis. they apologized for poor decisions made during that time in meanwhile at times was a contentious hearing.
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we'll take you live to our david faber in washington. wrapping up interviews there, coming up. a look at the day on wall street by moving into the financials as the day winds on. it had been close to 80 points. finishing the day at 10,681. s&p 500 picked up 9.5. and the nasdaq composite was strong. technology and leadership on the upside. up 25 points up on nasdaq. and now above 2,300 at 2,307. top story, some of wall street's biggest names on the hot seat on capitol hill in front of lawmakers look for answers to the recent financial crisis. cnbc's david faber has been manning the ship in washington. he has all of the highlights and the takeaways from today's key hearings. david, over to you. >> reporter: thanks, maria. today's first panel hearing in front of this inquiry commission, which will continue its work for the balance of 2010, did include some fireworks and some pointed questions from chairman, phil angelides.
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the first q&a was devoted solely to questions to blankfein. i asked angelides later. why the focus on goldman sachs and why the focus on some key transactions involving synthetic cdos? >> in 2004, the fbi warned that there is an epidemic of mortgage fraud across this country. it was very clear that a lot of these subprime mortgages were going to fail. but they never took the time do the due diligence. they kept packaging and selling them to investors and as it turned out in the case of goldman, and perhaps others, at the very same time they were selling these mortgage-related products they were betting against them and i think that's the kind of practice, if it turns out that that's what occurs that ultimately destabilizes it. >> reporter: loid blankfein did have an opportunity to answer those very same kinds of questions during the testimony. here's what he had to say.
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>> i'm just going to be blunt with you. it sounds to me a little bit like selling a car with faulty brakes and then buying out an insurance policy on the buyers of those cars. it doesn't seem to me that that's a practice that inspires confidence in the market. >> sir, every -- >> i'm talking about betting -- >> -- asset here is an institution probably professional-only investors dedicated, in most cases, to this business. >> representing pension funds who have the life savings of police officers, teacher it's. >> these are the professional investors who want this exposure. >> reporter: mr. blankfein, as you can see, getting a little emotional there in the early going. and again as i said, maria,ty took the bruchbt the questions. there's been this fixation lately on this idea that goldman sachs creating synthetic cdos, it was able to short the residential mortgage-backed securities that created them, essentially. by doing so, it benefited while those who actually bought the synthetic cdos, did not benefit.
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that's an open question at this point. something actually we've been aware of, or i've been aware of, for quite some time. very unclear on whether goldman was trying to construct a product though that ultimately to the detriment of the buyers of the product. back to you. >> yeah, lloyd blankfein really was emotion there. david, i guess my question surrounds derivatives. there is going to be an impact to the balance sheet, your profitability, if we do see a change with regard to derivatives to this upcoming financial regulation that we will see. what are you expecting in terms of derivatives and how that's going to impact the bottom line profitability of some these firms? >> reporter: yeah, very interesting. you know there seems that there will be more transparency when it comes to derivatives. in fact, i believe almost every executive on the first handle said they want that. they want exchange-traded derivatives. they want more transparency. but another key question actually came up in the second panel. somebody that i know well, kyle basset suggesting that there should be class ral posted on every derivative trade by these
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firms and that's not the case. would that certainly impact the profitability of some different units trading different asset classes within derivatives. we'll see ultimately where that all ends up, when and if we get regulatory reform. >> yeah on the back puncher here with the health care debate, certainly front and center. david, thank you very much. david faber in washington. let's get all of the action now in terms of investing. bob pisani on the floor of the nyse, our eye here. we saw the fed releasing the beige book today. we also saw investors digest those results. and then at the end of the day, i thought that was really interesting. first, you see a big move up, the financials and tech. >> yeah, early on. >> up 80 points on the dow and then things came off in the final five minutes. >> we ended off of the highs today. i tell you the thing that they're talking about down here, maria, the lack the volume. into the second week. the first week, all right, everybody's not back. >> and i thought that the beginning of the earnings period would really spike up volume. >> yeah and it hasn't happened. the volatility is still -- the vix at 18 or 19 that the point, folks. the big, big issue here is when are we finally going to start seeing some notable volatility? because that's when the traders
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really start to get involved. right now still sitting on the sidelines by in large here. 3-to-1 advancing to the declining stocks. not far from the highs today but again that volume's the issue. beige book came out as maria just referenced here. bottom line is cautiously optimistic but a lot of very, you know, let's be careful kind of comment in there. loan demand weak. the credit quality, the fed says, continues to deteriorate. the labor market was generally weak. these are very cautious comments from them. that came out in the middle of the day. how about that whole financial hearings? david did a great job covering all of that back and forth between phil angelides and of course lloyd blankfein. all financials generally strong, citi was throughout the day but ended the day slightly to the downside. the big debate down here is lawmakers generally had a lot of nerve, most traders down here felt, about asking the banks to be penalized when they're the ones who repaid the t.a.r.p. with interest, while at the same time, nobody's bringing in aig and the car companies. sort of left out of this whole discussion. traders felt that was very unfair.
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let's move on, talk about some the big energy stocks. weak today as we the oil inventories the weekly numbers. we did see a greater than expected build for inventories, gasoline and oil. big refiners were weak on that news. the airlines, well, the last two days, as oil has been weak. the airlines have been to the upside, once again today. look at ual there up almost 10%. most of the other ones up 3% to 5%. when you don't know what to do on a day like today you often go and buy the defensive names. we saw nice moves up in many the drug names. merck upgrade from credit suisse. the hospitals were strong after some positive comments from hma. that occurred last night after the close. finally from hershey's, still struggling, ever since they announced that bid for cadbury, they've been struggling. the stock moving down here today after confectioner announced not a bid for cadbury. remember, nestle's also dropping out and so we have hershey's, there you have hershey's throughout the day and that stock's had a horrible time for the last several months. >> bob, thanks so much. >> pleasure. >> bob pisani there.
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in the midst of low volume, low volatility what's an investor to do now? answers right now from eric merenac. stewart freeman the chief market strategist for wells fargo advisers. gentlemen, good to have out program. >> pleasure. >> pleasure to be here. >> eric, kick this off with you, tell me how you are positioning yourself. when you come into a new year and see that volume is on the low side, volatility not what it was, just a couple of months earlier. how do you invest? >> for us it's the same way we always invest. we have a portfolio that's very well defined. invested in the 25 to 30 stocks. and last year was -- turned out to be a very good year once we got past march but this year will be a little bit different. >> a lot more selective and fundamentals will matter a lot more. >> stuart, what about you, do you make any changes when you see volume on the low side? >> well, we think it's going to be still a year where the more cyclical stocks outperform. we like the industrial companies. we like the base materials. y woong the earning growth will
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benefit from recovery is where you are going to see some of the better performances still this year. and but we're actually underwaiting health care and staples and utilities, areas that aren't necessarily beneficiaries of an earnings recovery. but we're going to see more volatility this year. you know last year we there a very strong market. our target's only 1175, 1200 this year. >> why do you think the volume on the light side? i thought that the earnings period would probably spike things up a little, and yet we're waiting. we're waiting on the action in terms of volume. >> i think -- i think it probably -- you've got investors wondering and waiting on fourth quarter results. and i think there's question marks with respect to unemployment. there are various issues out there after the market has run as strongly as it has it's run 60% plus. earnings estimates on the street run $20, $30 for the s&p in the last seven months.
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and now expectations are here in line with reality again. >> yeah, that makes sense, that the earnings period -- we've only heard from alcoa, really, for the most part, in terms of the majors out of the s&p 500. but things will get busier when intel, jpmorgan later on this week, and certainly into next week. so what are your expectations in terms of earnings for the fourth quarter? stuart, do you think that we'll see the beginning of a recovery in terms of earnings? and yes, we saw better than expected numbers over the previous few quarters, but we were still waiting on revenue growth indicating end-market demand. do you think that we'll see that in the fourth. >> depends on how you look at it. a couple of quarters of revenue growth for the s&p consecutive quarters so far. and this probably the third one. earnings up 38% from the bottom. we think that they'll be up again, year over year, softer, but we think for next year, earnings will be up $76 area versus $62 this year. so i think we'll see numbers better than expected in the fourth quarter.
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but not the same dhag we saw in the second and third. >> all right, leave it there. gentle men, good to have you on the program. thanks for your insights tonight. see you soon, thank you. america's top banking executives facing music on capitol hill today about their roles in the recent financial crisis and their company's roles, more importantly. issues, such as bank bonuses, still making waves on wall street and main street alike. up next find out what some experts are saying what needs to be done in terms of incentives and the hot-button issues specifically of compensation. plus the worst earthquake in more than 200 years in haiti. we've got the latest development nmts wake of that major disaster in the caribbean nation. stay with us on that. later on, my one on one with billionaire investor sam zell, coming at nus a few moments. find out what he says about the real estate recovery, what's possible later on this year. he's coming up.
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welcome back, as wall street gets state pay out new record bonuses for 2009, representative
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barney frank will hold a hearing on pay at financial firms. mary thompson now with the story. >> reporter: maria, calling compensation in the financial industry, a legitimate concern for the economy, the chairman of the house financial services committee will hold a hearing on this issue a week from friday, january 22nd. to be discussed should shareholders be given a vote or say on pay for more than just the top five executives at financial services firms? whether bonuses should be taxed at higher marginal rates? new rules make it harder for firms to retain talent or cause these firms to flee the united states? here's representative frank. >> i want to look at compensation. now in the broader -- in the broadest context. it's a national competition. whether or not you're going to have people going into different industries, whether or not if this is a strength on somewhat of what they do, if that is a bad thing. you know i continue to wonder what it is about the character of the people in that industry that says if they're being paid large amounts of money and need
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to get extra bonus jes frank said no one is talking about comping pay and also acknowledge the that the government is limited in what it can do in this area. speaking of compensation, some details emerging today about what bank of america's employees can expect at bonus time. a source close to the bank confirming reports the up-front cash portion of the bonuses -- of the bonuses for junior bankers will be doubt an average of 25%. for senior bankers 5% to 15% of their bonus total. well below the 50% in cash for most of the banks employees received as part of last year's bonuses. the remainder of the 2009 bonus pool made up of deferred stock and cash payments. a bank of america stock price. details about this have yet to be finalized. the bank's board is going to be voting on it at the end of the month. and of course, these payouts for bank of america, maria, they're dpu out in february. back to you. >> all right, thanks so much, mary. meanwhile the obama administration stepping up efforts to recoup billions in t.a.r.p. money. tomorrow, we're expecting a key announcement as part of that plan. cnbc's john harwood is in washington now with that angle.
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john? >> reporter: maria, what we've got is the administration preparing to roll out this plan to raise somewhat under $100 billion. not quite as much as we thought earlier where estimates went up to $120 billion from these major institutions, they believe, benefitted from bailouts. the tax would be structured to hit the dealer/broker part of the banks. not the traditional lending and deposit portions of the bank. that's partly a way to answer objections that this might interfere with lending. now, some the bankers who were testifying before that bailout commission today were asked about this. jamie dimon of jpmorgan chase expressing concerns, but not outright opposition. >> i think that using the tax system to try to punish people is inappropriate, but i don't think it's -- but i don't think it's inappropriate -- i want to make it very clear -- is that if you have a resolution mechanism that is -- like the fdic has today that the industry pay for it. so i think it is perfectly reasonable the industry pay to take care of itself. >> reporter: so this debate, of
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course, maria, is going to be accelerated from here. it's really the formal beginning, more or less, when the president lays this out late tomorrow, almost around noon tomorrow. it's going to be the beginning of the budget back and forth in debate, where republicans are certainly to attack and so will the industry. the administration thinks a strong hand given the size of the profits with the bonuses on wall street right now. >> watching that one, john thank you so much. john har wood from washington tonight. fiut if he's seeing a real turnaround this year. remember when things were booming, he was a seller. but first the very latest on that devastating earthquake in haiti. we will look at the recovery efforts, the most recent developments all ahead. national car rental knows i'm picky.
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well, the top story for the world today, a massive world wide relief effort is gearing up to help haiti recover from a massive earthquake. the country's president calling the damage unimaginable. there are fears that over 100,000 people may have been killed. in one risk assessor estimates that the damage is in the hundreds of millions of dollars. nbc's kristen dahlgren is in miami right now with the very latest. kristen? >> reporter: hi, there, maria. communication has been virtually cut off with the hardest hit areas. 90% of people here have been unable to reach their families
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back in haiti, but pictures they are seeing are absolutely devastating. take a look. as you said thousands are feared dead. many more believed to be trapped. haitians have been piling bodies up in the street and as you are watching these picture, keep in mind that haiti's already the poorest country in the western hemisphere. so many fear this is just the beginning of a major humanitarian crisis there. the president here has pledged u.s. aid to haiti today. here's what he had to say earlier today. >> the people of haiti will have the full support of the united states in the urgent effort to rescue those trapped beneath rubble and to deliver the humanitarian relief, the food, water and medicine that haitians will need in the coming days. >> reporter: now, senator george lemieux told me that two coast guard cutters are off of the coast of haiti. two more expected tomorrow. search and rescue teams from the u.s. are also making their way toward haiti, but we're also told at this point 12 students
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from lynn university near florida are among the missing, as well as a student from uc-davis. so a lot of people here in the states waiting for any word from haiti. maria? >> all right, thanks very much, kristen. i wonder if there are ripple effects that you can talk to us about. the dominican republic. other areas that are getting impacted here. obviously away from the actual hit. >> reporter: yeah, absolutely the dominican republic shares hispaniola with haiti and their economies are very closely linked right next door and so that's an area that's feeling it. there were aftershocks afterwards. some of the ripple effects of the quake making it towards those outer areas, but the caribbean, in general, i think, feeling this very closely, watching the people of haiti and around the world, people really sending help and many here and in haiti saying it is going to take a world effort. so right now help coming from as
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far away as china and a lot of the world, the uk and canada, among the countries that have also pledged aid. so this is a far, far-reaching disaster, and one that we'll be talking about for quite some time. >> kristen, thanks very much. kristen dahlgren for the latest there live tonight for us on that devastation. we want to bring you a story that is happening as we speak. there is a lot of talk on the floor of the new york stock exchange tonight about specialist firm lebranch. the stock was halted, news pending, a little while ago. and some traders mentioning to me that there's a meeting happening right now with lebraurch. now this is a stock that has been rumored for some time about the possibility of a sale. a lot of names being thrown out there. bob pisani called the company, and there is no confirmation from the company. but of course the rumors have been out there that lebranch has been -- has been talking to players. there is a press release out right now on the branch and
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we're going to bring bob pisani on the air in a few minutes to talk us through what is happening. of courts rumors would that it would be sold tay larger player. straight ahead when it comes to real estate you'll want to hear what our next guest has to say, investor sam zell will break down the outlook for housing in the new year and what the weakness in commercial real estate is indicating about the health of the broad economy. stay with us.
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welcome down to the floor of the new york stock exchange. i'm bob pisani with some breaking news. designated marketmaker lebranche has announced that they are selling their business.
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their designated market business, maker business to barclays for $25 million. now there have been rumors around for a long time that lebranche might be selling and a significant part of their business. it is not, however, the entire company. the company, lebranche has announced they'll be retaining their nondesignated marketmaker assets and that would include some the shares at the nyse stock that is substantial that they hold. barclays for them a fairly strong transaction, only $25 million, but it will enable lebranche to free up a lot of cash and get into some other businesses as well. we'll give you any further news if we get some response from the company directly. maria, back to you. >> all right, bob, thanks so much on that story. meanwhile the issue bonuses, a story all day, taking center stage today on capitol hill. my next guest tackled bank compensation in the "the wall street journal" op-ed today. should play employees what they want but time to break up those banks that are too big to fail. good to you have on the program, sir. what do you think the government
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task force should do in terms of bonuses and as it -- and as they relate to the financial crisis? >> well, i think there's going to be a lot of demagoguery but i don't think that they really can do anything about the size of the bonuses. we just have to reach a situation where the large banks in the u.s. are not holding us hostage and taking our money when they lose money and paying the associates huge bonus less they make money. >> so where do you stand on bank bonuses then? do you think that the government should be dictating what the average compensation or the compensation is at the banks? >> i don't think they should. i don't think they really can do it in any sort of competent or effective way. so i think we have to you know turn the banking industry back to the private sector. and to the extent that these banks are so big and so vital that they're going to bring down the whole economy, we ought to break them up into small, digestable pieces that could
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actually compete. >> well, you said that the government needs to break up the banks that are too big to fail. what qualifies to be too big to fail in your view? you know, some people feel that if you do break up the banks the way chairman volcker has been talking about, you leave a lot of businesses on the table and lost profitability. how do you see it? >> well, if you look at 25 years ago there were no u.s. banks, no u.s. financial institutions among the world's top 25. banks were supplying plenty of capital. they were very competitive. and if they'd lost money, they went out of business, just the way basic economic theory tells us they should. nowadays, these banks have become gigantic behemoths are very inefficient, very slow-moving and basically have kept the u.s. taxpayer hostage so i think there would be some efficiency loss dpt we broke them up, maria, but much less than the savings of the billions and billions that we're doing with the t.a.r.p. bailout.
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>> so you're saying, make the lenders pure vanilla lenders and the banks it's investment banks that are into more exotic trading and different instruments, like derivatives that should be separated from actual lending which is so critical to the consumer economy. >> right. that the way people make big bonuses is not through basic bank services like lending. it's through the highly profitable derivatives trading. >> right. >> and yet we're propping that up with government bunny just as we are with the deposit and the loans. >> do you think that we'll see a change in that regard with the upcoming financial regulation reform? >> no. no. this is to -- too big an important package for the politicians to let go and what's in their political interest is not what is in the country's economic interest so i'm not optimisting for truckive change. ing a bit cynical on that front actually. >> and yet you hear regulators coming out and talking about
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ensuring that consumer is safe and that the consumer is protective. >> right. i think that the keyword in that sentence was "talking." it's the action that i'm looking for. and i haven't seen much of it. we haven't even gotten credit rating agency reform. so you know we haven't done the easy stuff. we're not about to number a position to tackle the difficult snuff my opinion. there will be lots of hearings and lots of sound bites. >> what's your view in terms of the health of the banks that the point? obviously, many of them have gotten through what many say was the toughest time in the history of the firms. >> right. well, it's an interesting question. you know several months ago, all the banks needed massive transfusions. and now the government's asking for the blood back. and tomorrow, president obama's going to go on tv and say we want to have huge taxes. >> right. >> so really nobody can seem to make up their mind whether these people need a bailout or supposed to be giving a bailout but i think that they're in good shape now but things could
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change because it's a trading business. and it's up one month, as you well know. down the next. so what i'm concerned about is the long-term prospects. and i don't think that the fundamentals are there because it's a gambling, it's a trading business. markets are pretty efficient. it's hard to make money over the long run. so they're okay now but i don't think in a year or two. >> good to have you on the program. thanks so much. we appreciate it. jonathan macey, coming to us after his op-ed in "the journal" today. sam zell with us talking everything from the outlook from the retail sector to the challenges facing publishing and real estate. my special guest, sam zell next up.
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welcome back. lower mortgage rates have helped boost refinancing, home sales also surged 43% from january to november last year. boosted, of course, by the government's first-time home buyer's credit. joining me now way cnbc exclusive, where he's putting his money today, sam zell is founder and chairman of equity group investments. sam, always a pleasure to have you on the program. >> my pleasure. >> can you characterize for us where we are in real estate, give us a sense of the residential and the commercial side of things in this recovery right now. >> i think that on the residential side, i think we've passed the worst.
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that doesn't mean that hits wildly better but it's very clear that i think we're starting to see prices increase and stuff coming off the bottom. there's still a lot of foreclosures. there's still a lot of you know last year stories that will have to be cleared but i think we've seen the bottom of the housing market. i think that it will continue to recover throughout all of 2010. >> what did you see -- we were in the middle of the biggest boom. and of course there was some talk and speculation that things were getting overheated. but you were there as a seller. and you really did see the signs in terms of cooldown. what did you see specifically that caused you to become such a big seller. >> in all fairness i didn't sell everything. >> of course you didn't sell anything but some big deals at the top. >> yes. and i think that rather than trying to make some macroeconomic decision, i think you just -- you know, you have to look at it and say, you know
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every day you don't buy. every day i don't sell, you're buying. and i started looking at what the yields were and what the prices was -- were, and from my perspective, i didn't think it was that tough a decision. i mean, somebody was making me a godfather offer. >> right, and you said, i just have to take this now. >> i got to take. >> paul crewman in an editorial last week who said that the commercial real estate market followed a bubble much like the housing market. concluded that the housing bubble could not be unique to the housing sector. would you agree. >> no. i think the housing sector was pushed way out of line. i mean there's no comparison to the extent to which the housing market was overexpanded versus the commercial real estate market. and i think by the time we get done with, this we're going to find that fraud played a very major, major role in the housing
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side. you know it was free money. and people were in effect, creating mortgages, brokers that were, in effect, twisting people's arms. they had liars loans. i don't know why anybody would be surprised. >> yeah. and you think it was fraud in some cases? >> oh, i think there was a lot of fraud. i think that -- and i think we're just beginning to see it. >> we're going to really see the book on that one -- >> yeah, you're going to see examples of mortgage brokers telling you know potential buyers how much their income has, to whether they the income or not. you know, telling them they've got to put down, they've got a job when they make this much even though they don't, et cetera, et cetera. >> what are you seeing in commercial real estate in particular? so many people are worried that 2010 is the time when we actually see the defaults on those deals. what do you think happens? >> i don't have the same view that most people have. it seems like the latest
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silvants are all saying commercial realestate is the next shoe to drop. first of all,rcial real estatee really have to distinguish between what i will call the institutional market and the rest of the market. the rest of the market, and particularly in smaller banking institutions, there's an awful lot of construction loans and other problems that, for sure, will become a part in 2010. but in terms of the institutional market, real estate and commercial real estate has always been about supply and demand. we have not had a new commitment for anything since july of '07. i don't think we're going to have a commitment for anything new for the next 2 1/2 to three years. the result is we're going to go through five years of no new development. the current problems are demand created. and if in fact we have a recovery, i would envision that the current, say, you know, cbd, you know high-class office space, i think that will fill.
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i think the high-quality retail will do just fine. >> well, you don't have a lot of new development but you have a lot of supply, nonetheless. >> right. >> talk about consolidation, you talk about firms moving out of their spaces. >> but you have to -- but you have to -- you know, you have to look at the overall picture. and the overall picture, even though there is a lot of, quote, supply today, with no new demand and an economy that's starting to recover, i think the demand for that space is going to be significant. it won't be at the rates that were projected into '07. but in fact i think we'll see the institutional real estate markets fill up. >> let me ask you about how you've been investing recently. and of course, while there is some question about commercial real estate in the u.s., broadly speaking, you are really seeing opportunities outside of the u.s. you've been an investor in brazil. >> yes. >> to a sizable amount. tell me what you see in brazil
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and where specifically you're putting money. >> well, we -- you know, we've looked at all of the markets all over the world. we feel that brazil represents a very unique set of circumstances. it's politically stabile. it's energy self-sufficient. it's got a growing population. it's an educated population. and consequently, it's now, for the first time, beginning to kind of step out. and it went into the crisis with almost very, very little debt. so it doesn't have the massive deleveraging that other places in the world might have to deal with. we're the largest shopping center, owner in brazil. we're the largest home builder in brazil. we just made an investment in the last two weeks where we took a position in a major real estate finance company, which was kind of the first created in
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brazil you know in the last five, seven years. and we continue to be very positive and feel that it has a great future. >> i think it was jeff immelt who said to me a billion people are going to be joining the middle class around the world -- >> that's correct. >> which of course has tremendous opportunities. >> well, that's the whole theme of brazil. >> exactly. >> that was our theme in mexico. >> and this is also your theme in other emerging markets where you are focused on home builders, right? >> yeah. and we've focused on home builders because they represent the first step up from lower to middle. and i think that there's a great desire among the governments, as well as the people, to go in that direction. >> it's interesting to see you know one of the great investors, like yourself, putting money outside of the united states. that's really where the growth is coming from a number of american countries today. what could be done here, should be done here coming out of washington, coming out of the
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executive suites in the u.s. what do you think president obama should be doing right now in terms of getting things moving again for business? >> i think president obama should stop major programs and focus on the economy. in 1992, when bill clinton ran, the theme of his campaign was, it's the economy, stupid. >> it's economy, stupid. >> and as far as i'm concerned, in the kind of scenario that we've been in over the last year and a half, there is nothing more important than focusing on the economy. >> but, sam, he's out every day doing press conferences, talking about jobs, talking about, you know, looking at the economy. you think that's all p.r.? >> i just -- you know, that's asking me a question. i'm not sure i know the answer to. what i do know is that you know, starting major programs with major deficit funding, using gimmicks to make them, quote, deficit neutral by collecting money for five years, and then paying and then saying over the ten-year period, it is deficit
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neutral. >> right. >> i mean, who's kidding who. >> i don't know how trillion dollars could be deficit neutral for health care. >> well, the answer -- unfortunately -- i wish the number were only a trillion dollars. and i think the risk is dramatically greater. and i think that nobody in washington is really taking the risks involved in what they're undertaking. >> but at the end the day, they've got elections to look at. if the economy doesn't get fixed and we don't see job creation, at some point you can't say i inherited this. it has to be, well what have you done, right. >> do you think that health care mandate will increase jobs? i don't. an awful lot of small businessmen who are sitting there deciding whether they should hire another person or not are looking at some kind of a health care mandate and saying, wow, i don't want to take that on. >> right, too many uncertainties. >> yeah. >> not add heads to the payroll. i get that. >> the answer is, jobs, jobs, jobs. >> yeah. >> and at the same time, the answer is, you know the classic
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medical profession's mantra, do no harm. >> switch gears, ask you about the media sector. sam, everybody knows that "tribune" still in reorganization. when are you expecting it to emerge from chapter 11? >> number one, i would tell you that "the tribune" is doing very well. i think that an awful lot of the steps that management of this company has taken to change the model, to reduce costs, to make the operations more efficient have all been coming through. so i'm very optimistic about the future of company. i, obviously, don't know when it'll come out. but i think it's reasonable to assume that it will come out probably in the first half of this year. maybe, if notions go easier, maybe even as soon as the end of the first quarter. >> sam it is great to have you on the program. >> my pleasure, maria. >> so appreciaterour insights. >> good to see you. >> good to see you as well.
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sam zell founder and chairman of equity group investors there. coming up next what else could move the markets tomorrow and we'll get you set up are if the opening bell tomorrow and the big winners and losers in the video game industry. a business that's making billions but it's not all fun and games to the companies involved. back in a moment. trading is all about strategy. and strategy... is all about information. heat mapping shows me where the money's moving. twenty five hundred stocks... one quick look. that's where the action is. plus, this amazing gadget... it's called the telephone. i can call td ameritrade anytime and talk trades, strategy... anything. td ameritrade. built by traders, for traders. this is what i need. announcer: trade commission free for 30 days, plus get 100 dollars cash, when you open an account.
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well, one quirky pastime, video games. multibillion dollar business. right now we are getting clarity about which companies are raking in cash which are getting hit hard in that industry. julia boorstin with the story. >> good news for nintendo wii owners. they are getting more access to content ever. nintendo made a deal with netflix, access streaming video through the wii council. >> the partnership expands our offering beyond games and into a wide range of different types of movies and tv shows and other programs and importantly gives our consumer even more value. >> game makers are also making
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headlines. warfare ii top of more than $1 billion in retail sales since its november launch. continuing to beat expectations it is on track to be the biggest video game ever. time warner's game division with sesame street's beloved crew. warner brothers interactive entertainment inked a deal to publish games based on big bird, oscar the grouch and the gang. not everyone has the latest had its forecast cut for weak holiday sales. ubisoft underperformance expecting to end the year with an operating loss. >> i think you are going get fewer and fewer and fewer of those. i think we will see a shift away from casual games. a shift towards really big propositions and already told us they are going to make fewer gains in 2010 than 2009. they are cutting out all the marginal projects. >> while video games sales dropped 11% last year to dollars
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10.5 billion he expects software sales to rebound this year projecting 10% growth. at least it is not all bad for 2010 in the video game industry. >> thinks so much. live to the nasdaq market site. melissa lee stands with a preview of what's coming up on "fast money." >> it is all about trading. you will get angry over the hearings on capitol hill with the big bonuses the banks are handing out this year. our traders will give you the trade ahead of jpmorgan friday morning. you heard the news of google. take a look at the cyber security plays out there. all that and much more at the top of the hour on "fast money." >> we will see you in five minutes. big day on tap tomorrow. an exclusive interview of timothy geithner. you will see the exclusive interview at 4:00 p.m. tomorrow on "closing bell." speaking of thursday, intel
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earnings, one of the many things that will set us up for tomorrow's trading session. we will tell you what else can move the markets and what to expect. the latest on the supreme court case that could have the big ripple effects in the world of football. you are watching cnbc. first in business worldwide.
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a big day as intel prepares to release fourth quarter earnings and will set the stage for broader tech investors sxektsed to be very good news. previews and numbers all day long on cnbc. >> i'm steve liesman. cnbc global headquarters. tomorrow waiting for a deluge of data. looking for retail sales and jobless claims at a 30 along with import prices. ten cloak, look for business inventories. >> rick santelli on the floor. 1:00 eastern for the results of the last big auction of the week. that's $13 billion 30-year bonds. first two auctions have gone well. three-year and ten-year. tune in to see tomorrow's results. >> so should the nfl be shielded from antitrust lawsuits? one major question that's being

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